What's the typical cost for filing 6 years of back taxes? Is $7000 reasonable?

This price is absolutely outrageous! Your neighbor is being taken advantage of. Filing back taxes, even for 6 years, shouldn't cost anywhere near $9,500 for simple 1099 income with minimal deductions. A reasonable cost would be around $250-400 per year for straightforward self-employment returns, so maybe $1,500-2,400 total for all six years. Even if there are some complications, it shouldn't exceed $3,000-4,000 for the whole package. I'd recommend your neighbor contact a local CPA or Enrolled Agent instead. They can handle this type of situation routinely at a much more reasonable rate. Many offer free consultations where they can provide a proper estimate based on his specific situation. The financing option is another red flag - they're essentially trying to lock him into a payment plan for an already inflated service. Companies that cold-call offering tax services are often predatory and target vulnerable individuals, particularly seniors.

I was in a similar situation last year with 4 years of unfiled taxes. I tried contacting several CPAs but kept getting quoted $4-5k total and couldn't afford it. I was seriously stressed until I found this AI tool called taxr.ai (https://taxr.ai) that helped me organize all my tax documents and figured out what I could claim for each year. The system walked me through each tax year separately and identified deductions I didn't even know I qualified for. Then I just took that information to a regular tax preparer who charged me about $300 per return since everything was already organized. It was such a relief to get everything filed without paying those insane fees from the tax resolution companies that kept cold-calling me. The AI did most of the hard work figuring out what forms I needed and what I could claim.

I was skeptical about using an AI for my taxes like I mentioned, but I decided to try taxr.ai after getting quoted $6k by a local firm for my 3 years of unfiled taxes. I'm actually impressed with how well it worked! The system found several self-employment deductions I had completely forgotten about and helped me reconstruct my mileage for business travel based on my calendar entries. The best part was when I took all the organized information to a tax preparer, they only charged me their regular rate since all the hard work of organizing multiple years was already done. Ended up paying about $1,200 total for all three years instead of $6,000. And I actually got a refund for one of the years I thought I'd owe on! Definitely saved me from those predatory "tax resolution" companies that kept calling with their ridiculous prices.

Your neighbor should avoid these tax resolution companies at all costs! They prey on people's fears about the IRS. I used to work in a tax office and saw these scams all the time. Another big problem your neighbor will face is actually getting through to the IRS to resolve issues that come up after filing. The phone lines are nearly impossible to get through on - I tried for WEEKS last year with no success. I finally used a service called Claimyr (https://claimyr.com) that somehow got me connected to an IRS agent in about 20 minutes when I'd been trying for days. They have a video showing how it works here: https://youtu.be/_kiP6q8DX5c Once I actually got to speak to a real person at the IRS, they were surprisingly helpful about setting up a reasonable payment plan for what I owed. The IRS agents themselves are usually quite reasonable - it's just nearly impossible to reach them without help.

I need to publicly eat my words here. After calling BS on that Claimyr service in my previous comment, I actually tried it when trying to resolve an issue with a missing refund. I was absolutely convinced it was another scam, but I was desperate after trying to reach the IRS for THREE MONTHS with no success. To my complete shock, I got connected to an actual IRS agent in about 35 minutes. The agent was able to identify that my refund had been flagged for additional verification and helped me provide the necessary documentation to release it. Problem solved in one phone call after months of frustration. For your neighbor's situation with 6 years of unfiled taxes, being able to actually speak with the IRS will be crucial once the returns are filed. They can help set up payment plans and sometimes even reduce penalties if he has reasonable cause for the late filing.

The most cost-effective approach would be for your neighbor to prepare and file the returns himself. If they're truly simple 1099s with minimal deductions, tax software can handle this for around $50-75 per year. The IRS has a "First Time Penalty Abatement" policy that might waive penalties for the oldest year if he's had no previous issues. He should definitely ask about this once everything is filed. Also important: the IRS generally only requires the last 6 years to be filed, so he might be right at the cutoff point. If he owes money, he should prioritize the most recent 3 years first, as those are most important for compliance.

I actually worked for one of these "tax resolution" companies for 3 months before quitting in disgust. The $9,500 quote is their standard starting point for 6+ years of returns, regardless of complexity. They're trained to scare people about IRS enforcement and push financing options that end up costing even more with interest. Your neighbor should look for an Enrolled Agent (EA) who specializes in back taxes. They typically charge $200-350 per back year for simple returns, and they're specifically licensed by the IRS to handle tax matters. The good news is the IRS is generally reasonable about payment plans. Once the returns are filed, your neighbor can likely set up a monthly payment plan with the IRS directly - often with much lower payments than what these resolution companies try to finance.